Interesting article.
One thing I think that Altucher is right about is that the pandemic will cause unsustainable institutions to collapse all at once. In this case, the finances of NYC as well as the economics of Broadway for the actors and techies. Nobody is paid well enough relative to cost of living to be able to weather a storm like this.
(I also hope that this enough of a wakeup call to my generation that people start learning to keep an emergency fund around. People who say “I can always cut back my expenses when things look bad” have just been shown an object lesson why that won’t work. Ditto for businesses. We haven’t had a bad recession since 2007 and some non-zero number of businesses will fail because they got complacent and expected the good times never to end.)
Secondly, things like saying “The hot dog stands outside of Lincoln Center? Finished.” Perhaps those individual vendors will go bust and leave the city, but as soon as people come back, someone will be there to sell them hot dogs (and assuming there is not some institutional or cultural hot dog selling knowledge lost in the change, be indistinguishable from the old guys).
Thirdly, as much as I hate to say it, I am not convinced that remote work actually is equal in productivity. At the very least I will say it is not quite yet. Altucher’s section F rests on this being true: “And you can be just as productive, make the same salary, have higher quality of life with a cheaper cost to live.”
There have been small companies that have operated on a remote basis for years (Basecamp being the perhaps the most famous of course). But we have never seen an organization of the size of Facebook or Google do it. Maybe they’ll have some data that show that people are as productive remotely as they were in the office. But I think that is by no means a foregone conclusion.
I will say for me personally, as disciplined as I am as a person, there have definitely been days when I have been more distracted at home than I would have been in a comparatively boring office. I would postulate that efficiency is hurt by remote work inversely proportional to the quality of the leadership and whether the work is interesting. I think a well-led team that believes they are making meaningful contributions to an important project will probably work just as hard from home, because they have strong internal motivation. But if they aren’t really motivated by the team or the work, it becomes much easier to be distracted five minutes at a time. So I think the companies with the most rote, uninteresting work or the weakest leadership will disproportinately see lowered productivity with remote work. (And many of the weak leaders will want their drones back in the hive so they can “monitor” their “productivity”.)
Fourth,
Restaurants happen in clusters and then people say, “Let’s go out to eat” and even if they don’t know where they want to eat they go to the area where all the restaurants are.
This may have been true in the 80s, but these days with Google Maps and OpenTable, that’s not how it works, at least in my experience. You look on your phone to find a restaurant before you set out in that direction. That’s how we did it together in Washington DC, as well as when we’re traveling to other cities like Nashville or Austin or Las Vegas.
A good restaurant with a good web presence, good pictures on Google, and good reviews could be geographically isolated and do just fine. If we accept his argument that remote work and the internet have completely transformed NYC, then this idea doesn’t hold water for me.
Ultimately, I think the question is “Why live in New York City?” which is one that has puzzled me for years. It’s always seemed patently strange to move somewhere with extremely high cost of living, no space to spread out, and feel jammed in with other people like sardines.
But I know two friends who have moved to New York City, and the appeal seems like some sense of wanting to be connected to things, to be at the beating heart of an urban center, which generates some intrinsic sense of satisfaction. One friend, who was financially independent enough to buy an apartment and live there for years has since moved home and now lives in a similar, but much nicer high-rise apartment in downtown Raleigh. (In other words, it remains to be seen if you actually need to be in New York City to get that sense, or if there is some threshold of metropolis size at which you get nearly all the same benefits.) The second friend went to college in NYC and always dreamed of moving back, but never had the money. At this point, I doubt they ever will, but they have since gotten married and settled down in Raleigh.
Without understanding why people moved to New York City or chose to stay, it’s impossible to say if those things will come back. I have faith though, that where there is demand, supply will re-emerge. And if some things were economically unsustainable and never come back, then that’s fine too.
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